Most stocks have not been posting the most impressive returns since the Covid stock bubble burst in late 2021, and while the S&P 500 has been mostly flat over the past year, the median trailing 12-month return was -4.71% for the index and -10.08% for the broader U.S. stock market, according to the GuruFocus Aggregate Statistics chart.
There are plenty of stocks that have defied the bear market, though, especially in the energy sector. In fact, according to the GuruFocus All-in-One Screener, a Premium feature, there are even a handful of stocks (mostly mid-caps) that have more than doubled over the past year, with e.l.f. Beauty Inc. (ELF, Financial), Vista Energy SAB de CV (VIST, Financial) and Super Micro Computer Inc. (SMCI, Financial) making the top of the list. Let’s take a closer look at these stocks to see what has investors piling in.
E.l.f. Beauty
Shares of California-based cosmetics company e.l.f. Beauty (ELF, Financial) are up 232.66% over the past 12 months, trading around $85.23 apiece on April 13 for a market cap of $4.58 billion.
The company reported revenue growth of 49% and earnings per share growth of 183% year over year for its third quarter of fiscal 2023, an incredible year of growth following the previous two years, which were mostly flat on the bottom line and slightly positive on the top line.
E.l.f.’s success is proof that it is not about how much data you collect, it is about how you use it. The company leverages data not just from customer transactions, but also from website and app behaviors, customer service conversations and loyalty program surveys in order to tailor products to what its existing and potential user bases want.
Last year, e.l.f. surpassed Maybelline as Gen Z’s favorite drug store makeup brand through a combination of tapping into market trends, social media marketing expertise and low prices. Looking through the ingredients lists of e.l.f.’s products, it is clear the company likes to keep things simple with tried-and-true ingredients that are low risk as well as cheap and effective. There are also demo videos available directly on the company’s website for most products, which helps boost sales by capturing the interest of customers that want to get into makeup but do not know much about it.
Vista Energy
Mexico-domiciled oil and gas producer Vista Energy (VIST, Financial) saw its share price rise 137.33% to $21.47 over the past year, resulting in a market cap of $1.99 billion.
Back in 2019 and 2020, Vista was not even profitable, but since then the top and bottom lines have grown significantly. Year over year, revenue was up 75% in the fourth quarter of 2022, while earnings per share advanced 105%.
The company first went public in Mexico via special purpose acquisition company in 2017, after which it purchased two operating companies in Vaca Muerta, which is the largest shale oil and shale gas play under development outside North America. Vista also listed on the New York Stock Exchange in 2019. The Vaca Muerta shale formation is located in Argentina, which is likely why investors were not enthusiastic about the stock until the company started producing exceptional growth numbers.
As one of the poorest and least free economies in the world, there are significant risks associated with operating in Argentina. In particular, the country’s government keeps domestic oil prices artificially low, which is a drag on overall sales. However, Vista has been a key beneficiary of an energy market in desperate need of new sources of oil and gas following Russia’s invasion of Ukraine and OPEC+ production cuts, allowing rapid international sales growth to make up for low domestic profitability.
Super Micro Computer
Super Micro Computer (SMCI, Financial), a Silicon Valley-based information technology company, posted a 193.55% share price gain over the past year. As of Thursday, shares traded around $108.50 for a market cap of $5.65 billion.
The company’s profits have truly skyrocketed over the past year, with revenue up 53% and earnings per share up 302% in the company’s second quarter of fiscal 2023.
Super Micro Computer, or Supermicro as its operating business is known, is a company that has found itself in the artificial intelligence spotlight as it sells AI servers powered by Nvidia (NVDA, Financial) GPUs. Supermicro’s highly efficient processors require less power for daily operation, making them a cost-effective choice for fast-growing markets such as AI, data center applications, Edge and web services and more.
As a server assembler, Supermicro’s business is not the flashiest, which means share price growth is driven almost entirely by actual business growth. Fortunately, its close relationships with business partners such as Nvidia, Intel (INTC, Financial) and Advanced Micro Devices (AMD, Financial) are giving it plenty of growth opportunities in key markets. Supermicro is also in the process of transforming its business beyond server assembly to become a “Total IT Solutions” provider with server, AI, storage, internet of things (IoT) and switch systems, software and services.
